Hong Kong Stocks end mixed

The Hong Kong share market ended mixed after trimming losses late afternoon on Monday, 2 September 2019, on tracking strength in Mainland A-share market which buoyed up by speculation that Chinese government would roll out more forceful measures to keep growth from sliding below target range of around 6.0-6.5% this year, after the US and China imposed new tariffs on each other's exports yesterday. At closing bell, the Hang Seng Index declined 0.38%, or 98.18 points, to 25,626.55. The Hang Seng China Enterprises Index was up 0.2%, or 20.16 points, to 10,103.36.

The United States and China went ahead with their additional tariff increases on each other's goods from 01 September 2019, despite multiple indications last month of a possible breakthrough in trade negotiations.

 

The 15% US duty apply to about $112 billion of consumer goods ranging from footwear and apparel to home textiles and certain technology products like the Apple Watch. A separate batch of about $160 billion in Chinese goods including laptops and cellphones will be hit with 15% tariffs on 15 December 2019. The Trump administration has also announced that existing 25% tariffs on a separate group of $250 billion of Chinese imports will increase to 30% on 1 October 2019.

China's retaliation also took effect on Sunday, with higher tariffs being rolled out in stages on a total of about $75 billion of US goods. Higher Chinese duties that took effect 1 September include an extra 10% on American pork, beef, and chicken, and various other agricultural goods, while soybeans will get hit with an extra 5% tariff on top of the existing 25%. Starting in mid-December, American wheat, sorghum, and cotton will also get a further 10% tariff. While China imposed a new 5% levy on US crude oil starting from September, there was no new tariff on liquefied natural gas. The resumption of a suspended extra 25% duty on US cars will resume 15 December 2019, with another 10% on top for some vehicles. With existing general duties on autos taken into account, the total tariff charged on US-made cars would be as high as 50%.

China's official manufacturing purchasing managers' index, which looks at larger, state-owned companies, showed the sector shrank for a fourth consecutive month in August as the trade war piled pressure on the economy. The Purchasing Managers' Index (PMI) fell to 49.5 in August, China's National Bureau of Statistics said on Saturday, versus 49.7 in July, below the 50-point mark that separates growth from contraction on a monthly basis. However, private survey on China's manufacturing sector, Caixin/Markit Manufacturing Purchasing Managers' Index rose from 49.9 in July to a five-month high of 50.4 for August.

Blue chips were mixed. HSBC (00005) edged down 0.4% to HK$56.05. HKEX (00388) fell 1% to HK$237.6. Tencent (00700) jumped 2% to HK$331.2. China Mobile (00941) nudged down 0.1% to HK$64.9. AIA (01299) dipped 1.4% to HK$75.15.

Hong Kong's political unrest continued, and landlord bore the brunt of the turmoils. Wharf REIC (01997) slipped 2.4% to HK$41.45. Hysan Development (00014) retreated 2.7% to HK$30.9. Prosperity REIT (00808) sank 2.4% to HK$2.84. Link REIT (00823) shed 2.1% to HK$86.15. Swire Properties (01972) softened 0.4% to HK$25.65. MTRC (00066) declined by 3.1% to HK$44 after protesters damaged facilities in some stations.

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